Advocacy group calls on Trump administration to speed up digital identities

The Better Identity Coalition (BIC) sent a letter to the U.S. Department of Government Efficiency Service (USDS) – also known as DOGE – urging the new Trump administration to prioritize digital identity as a fundamental component of government efficiency and national security. BIC also released an updated policy paper, Better Identity in America: A Policy Blueprint for the New Administration.

The coalition said identity fraud is not just a problem affecting government benefit programs, but is a broader national security issue that impacts multiple industries and facilitates criminal activity on a global scale.

BIC commended USDS’s initial efforts to combat fraud in government benefits but stressed that the issue extends far beyond that scope. Organized criminals and hostile nation-states, including China and North Korea, have exploited weaknesses in digital identity infrastructure to steal billions of dollars, harming not just government agencies, but also financial institutions, healthcare providers, retailers, fintech firms, and cryptocurrency exchanges. These crimes do not only result in financial losses, they also fund human trafficking, drug smuggling, and even the proliferation of weapons of mass destruction.

To illustrate the urgency of the matter, BIC pointed to alarming statistics. The Government Accountability Office has estimated that identity fraud losses cost the U.S. government between $233 billion and $521 billion annually, with pandemic unemployment insurance fraud alone amounting to between $100 billion and $135 billion.

Additionally, the Financial Crimes Enforcement Network reported that in 2021, $212 billion worth of suspicious financial transactions were linked to identity compromise. By 2023, that number had surged to $394 billion, accounting for more than 70 percent of all Suspicious Activity Reports filed by banks.

The Department of Justice has also noted that North Korea has stolen over $2 billion through identity-related cyberattacks to fund its nuclear weapons program, while Chinese state-sponsored hackers have used similar tactics to infiltrate financial institutions and other critical industries.

To address these challenges, BIC proposed a set of policy initiatives for the new administration. First, they urged the government to develop a comprehensive strategy for digital identity, recognizing that federal, state, and local agencies play a crucial role in issuing authoritative identity credentials. Without a cohesive approach, the gaps in digital identity infrastructure will continue to be exploited by criminals and foreign adversaries.

Second, the coalition called for an expansion of mobile driver’s licenses and other digital identity credentials, suggesting that the federal government should provide grants to states to modernize their credentialing systems. With fraud in government programs costing taxpayers hundreds of billions annually, they argued that an investment of $1 billion in digital identity solutions would be a prudent step toward reducing these losses.

Third, BIC emphasized that while the government plays a central role in addressing identity challenges, the private sector must also be part of the solution. Private companies have led much of the innovation in digital identity security, and their technologies – including AI-driven tools for combating deepfakes and fraud – should be integrated into the national strategy. By working with accredited credential service providers, the government can create multiple pathways for Americans to verify their identities securely and efficiently.

The letter also pointed to President Biden’s January 16 Executive Order, Strengthening and Promoting Innovation in the Nation’s Cybersecurity, which called for enhancing monitoring, software purchasing, AI usage, and responses to foreign cyber threats.

The directive also mandated proof of secure software development from vendors, strengthened cybersecurity measures across federal agencies, and focused on protecting cloud platforms, among other initiatives. It also emphasized the establishment of digital identities, aligning with BIC’s recommendations. However, the order was among many issued by Biden that Trump repealed.

BIC says that improving digital identity infrastructure would not only enhance national security, but it would also create a more seamless experience for Americans in financial transactions, healthcare access, and online commerce.

Today, many Americans are forced to repeatedly verify their identities through inefficient online processes, despite already having gone through rigorous proofing for driver’s licenses or state-issued IDs. By allowing citizens to use high-assurance digital credentials, the administration could significantly improve security, convenience, and privacy.

“Today the account-opening process to access financial, health, or government services effectively forces many Americans to go through an online experience that effectively replicates the in-person identity proofing process they already went through to get a driver’s license or state ID card,” BIC said. “Americans should instead be given the opportunity to reuse a high assurance credential they already have.

By focusing on closing the gap between the nationally recognized paper and plastic credentials that most Americans have today and the lack of any digital counterpart, the Trump Administration can create a highly efficient, secure, and privacy-preserving foundation for service delivery and online commerce.”

In its closing remarks, BIC said outdated paper and plastic identity credentials remain a major obstacle to modern security and efficiency. While a handful of states have introduced mobile driver’s licenses, progress has been slow, and the government has largely focused on in-person use cases rather than the more urgent need for secure digital identity solutions.

The coalition’s updated policy blueprint, released the same day as their letter, outlines a 22-point action plan that the Trump administration and Congress can pursue to modernize identity infrastructure and protect Americans from the growing threat of cybercrime and fraud.

The coalition, which includes leading companies from financial services, healthcare, technology, telecommunications, fintech, payments, and security sectors, was founded to work with policymakers on improving digital security, privacy, and convenience. In its letter to USDS, the coalition made it clear that the administration has a unique opportunity to take decisive action. By modernizing digital identity infrastructure, the government can both enhance national security and dramatically improve the efficiency of services for all Americans.

“By focusing on closing the gap between physical and digital credentials, the Trump administration can make it much easier for Americans to protect and assert their identity in any domain – in a way that is more secure, convenient, and better for privacy than the legacy solutions we have today,” BIC said.

Article Topics

Better Identity Coalition  |  biometrics  |  digital identity  |  fraud prevention  |  government services  |  identity verification  |  mDL (mobile driver's license)  |  U.S. Government